Sampo, the Finnish financial group that owns insurers across the Nordic region as well as a significant share of Nordea, has moved to increase its stake in Topdanmark, meaning it will be obliged under Danish law to bid for all remaining shares in the second largest Danish insurer.
Announcing what it called a “mandatory no-premium offer for Topdanmark”, Sampo said it had acquired additional shares taking its total ownership of the Danish company to 33.34%. This means that it must make a “mandatory public cash offer” to other shareholders. Danish rules on publicly listed companies mean that where more than a third of voting rights have been acquired, an offer must be made.
“Sampo believes that actively obtaining over one third of Topdanmark’s shares and triggering the Mandatory Offer adds clarity around Sampo’s position in Topdanmark as opposed to passively increasing its ownership through a potential cancellation of shares as a result of Topdanmark’s share buyback programme,” the Finnish group said in its statement.
The price offered to other shareholders is DKK183, although shares in Copenhagen raced DKK5.9 to 188.4 in the wake of the announcement.
Sampo has four weeks under Danish law to put forward an offer document to other shareholders.
Topdanmark reported a 30.5% jump in life insurance premiums for the first half of 2016, while in the second quarter this year it made post tax profit of DKK430m (€58m). Full year 2016 post tax profit guidance has been upgraded to DKK1bn-1.1bn (€134m-€147m), representing earnings per share of DKK11.5.
Most of Topdanmark’s assets are held in the form of cash, investment properties, direct equity and bonds, the first half report shows.
The company claims over a million personal customers, every second Danish farm and one in six businesses in Denmark among its customer base. The overall business focus is Danish life and non-life insurance and pensions, and it has distribution agreements with many key Danish financial institutions including Danske Bank, Danica Pension, Sydbank and Nykredit.
Currently, Topdanmark shares are held through If P&C Insurance Holding Ltd, the Swedish property and casualty insurer, which itself is 100% owned by Sampo Group. If successful, the bid would result in Sampo having full ownership of Denmark’s second biggest insurer and a firm foothold in a third Nordic country after Finland and Sweden – besides business in certain Baltic States and Luxembourg.